Ministry of Finance and State Administration of Taxation, Enjoyment by Foreign Investment Enterprises of Preferential Enterprise Income Tax Policies on Additional Investments Circular

Issued: June 1 2002
Effective: January 1 2002

Main contents: The Circular states that income derived from investments in addition to those prescribed in the contract by foreign investment enterprises engaged in approved projects in the encouraged category of the Foreign Investment Industrial Guidance Catalogue may be counted separately and entitled to regular reduction or exemption of enterprise income tax stipulated in the PRC, Foreign Investment Enterprise and Foreign Enterprise Income Tax Law provided that the required conditions are fulfilled. For instance, the registered capital is increased to at least US$60 million due to such additional investments. However tax levied before January 1 2002 will not be refunded even if there were additional investments.
Related legislation: Several Provisions on Questions Relevant to Collection of Income Tax on Sino-foreign Equity and Cooperative Joint Ventures and Wholly Foreign-owned Enterprises Circular, 1986; PRC, Foreign Investment Enterprise and Foreign Enterprise Income Tax Law, Apr 9 1991, CLP 1991 No.3 p25 and Foreign Investment Industrial Guidance Catalogue (Amended in 2007), Oct 31 2007, CLP 2007 No.10 p22